EUR 100.00 For Business Accounts Only

IBERIAN DAILY 26 MAY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKING SECTOR, ELECTRICITY SECTOR, OHLA.

The tariff risk resurfaces
US markets saw new profit taking amid the challenging fiscal situation in the US. Meanwhile, European stock markets fell from highs following D. Trump’s new tariff threat to the EU with 50% tariffs starting on the 1st of June. Thus, in the STOXX 600 defensive sectors such as Telecommunications, Utilities and Household were the best performers, whereas Consumer Goods and Autos ended with the biggest drops, sliding near -5.0%. On the macro side, in Germany, the final 1Q’25 GDP rose by +0.4% vs. the three previous months, above expectations. In the UK, April’s retail sales climbed more than expected (1.3% MoM vs. 0.3% prev.). In the US, April’s building permits and new home sales came in better than expected. Separately, Trump agreed to delay the 50% tariff imposed on Europe until 09 July, although he threatened Samsung and Apple with 25% tariffs if they do not manufacture in the country. On the geopolitical front, the peace treaty between Ukraine and Russia has hit a setback, and the EU is readying new isolation measures that the US could join.
What we expect for today
European stock markets would open with gains of 1.5%, recovering almost all the ground lost after the tariff threat to Europe. Currently, S&P futures are up +1.10% (the S&P 500 ended +0.16% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.76% and Japan’s Nikkei +0.85%).
Today is a holiday in the US. No relevant macroeconomic data will be released.


COMPANY NEWS

OHLA. 1Q’25 Results in line on the operating level and sightly weaker in cash. OVERWEIGHT.
1Q’25 Results in line on the operating level (EBITDA € 27 M vs. € 26 M BS(e); +37% vs 1T’24) and marked by the good performance of margins (+100bps to 3.4%), although sightly weaker in Net Profit (€ -22 M vs. € -17 M BS(e)) due to higher losses in Discontinued Activities (Services; € -5.1 M vs. € –0.5 M BS(e)). Its net cash position came in at € 306 M, meaning € -146 M of cash burn, above our estimate and including Kuwait’s payment collateral, among other factors (€ -40 M) and the second capital increase (around € 77 M after taxes). We do not foresee a relevant impact from these results following the poor share price performance in 2025 (-5% in absolute terms, -26% vs IBEX).